Michael Peters from Yale University will present "Spatial Structural Change"

Abstract: We propose a novel theory to study the relationship between local economic development and aggregate structural change. Two forces shape regional variation in wage growth and industrialization: technological catch-up, often associated with spatial convergence, and regional sectoral specialization leading to differences in exposure to aggregate reallocation. We study these forces in the US economy between 1880 and 1920 when its agricultural employment share fell from 50\% to 25\%, and regional convergence was strong. We show that technological catch-up saved rural America from the adverse consequences of its exposure to the agricultural decline; without catch-up, spatial inequality would have increased.